Nigeria's Petroleum Industry Bill: From Bad to Worse?

Country: Nigeria
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Citing widespread corruption, oil theft and environmental devastation, an article in the October 20 issue of The Economist finds Nigeria's oil industry in a desperate state. The article expresses deep skepticism that President Goodluck Jonathan's attempts at reform through the Petroleum Industry Bill (PIB), now pending before parliament, will succeed in bringing about the reforms required to curb corruption and fraud. RWI's analysis of the PIB released last week found the bill severely lacking in controls on the state run-Nigerian National Petroleum Corporation (NNPC), a concern echoed by The Economist:

The state-run oil behemoth, the Nigerian National Petroleum Corporation (NNPC), will still control every aspect of the industry, from exploration and production to refining, pipelines and petrochemicals. The corporation has been judged one of the world’s most closed oil companies. A joint report by Transparency International, a Berlin-based anti-corruption monitor, and the Revenue Watch Institute in New York judged the NNPC to have the worst record of 44 national and foreign companies it examined. A recent external audit said it was “accountable to no one”. It has been called a “slush fund for the government”. The presidency’s hand is rarely far away from it. Mr Jonathan recently sacked its managing director, along with three other directors. Reformers think he should have got rid of the oil minister, too.

RWI's analysis found the PIB not only severely lacking in true transparency mechanism, but could actually make the industry worse. The report's author, RWI Legal Analyst Patrick Heller, said in statement. “Legislation that tries to reform NNPC could be good for everyone, but not if it adds to the uncertainty and dysfunction that already exist.”

Suzanne Ito blogs for RWI.

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